Is Apple Sitting on This Genius Maps Answer?

Apple (NASDAQ:AAPL) is likely to acquire navigation software maker TomTom in order to fix its heavily criticized maps app, an analyst has said, sending the Dutch company’s shares zooming up.

Why Could Apple Make This Buy?

TomTom already provides mapping and navigation data for Apple’s new program, which replaced Google’s (NASDAQ:GOOG) maps app in iOS devices, but buying the company will help quicken improvements, Rabobank International analyst Hans Slob wrote, according to Bloomberg. The mapping specialist could make fast changes to correct mapping errors as well as create new functions for Apple’s software, Slob said, giving the acquisition a 30 percent chance.

“TomTom needs the cash from Apple, and Apple needs the know-how of TomTom,” Slob wrote, estimating that the iPhone maker would pay as much as 10 euros per share for the firm. While TomTom chief executive Harold Goddjin had said in October that his company planned to stay independent, Slob felt a takeover by Apple would be a “royal way out” for the Dutch company’s founders.

CHEAT SHEET Analysis: Catalysts for a Stock’s Movement

One of the core components of our CHEAT SHEET investing framework focuses on the factors that could affect a company’s stock. Apple is flush with cash, making the acquisition an easy solution to fix its ridiculed mapping software. The buy would indicate to worried investors that the company was serious about solving the problem that has caused the iPhone maker much public embarrassment.

TomTom rose 7.2 percent to 4.12 euros after the news, registering its biggest intraday jump since October 19. The stock, on which Slob has a buy recommendation, is up 33 percent this year.